With the announcement of the second phase of the FAME scheme, the government had announced several incentives for electric vehicle (EV) makers. A parallel bid to localize the production of EVs, however, has now resulted in the government putting a localization content limit on these makes.

As discussed in a meeting of the Department of Heavy Industry on Wednesday, the makers will have to manufacture a minimum of 50 percent of components of EVs within the country in order to avail these incentives. The 50 percent bar stands alike for electric four-wheelers electric three-wheelers, two-wheelers as well as e-rickshaws. While in the case of electric buses, the bar drops down to 40 percent.

Applicable from April 1, the norms will apply to the 10,00,000 electric two-wheelers, 5,00,000 three-wheelers, 55,000 four-wheelers as well as 7,000 buses to be covered under phase 2 of the FAME scheme.

In addition to the incentives to the makers, the second phase will also bring subsidies to the buyers of these EVs, with up to Rs 2.5 lakh discounts on about 60,000 all-electric car units. Majority of the subsidy has been allotted to public transport means like e-rickshaws and electric buses.

Along with the local manufacturing of the EVs, the government has also pushed for indigenous manufacturing set up for the lithium-ion batteries. For this, PM Modi led cabinet approved the National Mission on Transformative Mobility and Battery Storage (NMTMBS) for a Phased Manufacturing Programme (PMP) of EV batteries.